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Tax Credit Financing and Syndications

Practices

Internal Revenue Code Section 1031 permits the sale of an asset and the acquisition of a “like kind” replacement asset, with a deferral of the tax liability that would arise from the sale of the first asset, in the absence of Section 1031. Property eligible for Section 1031 treatment includes investment real estate; depreciable personal property and livestock.

Our experience in advising our clients on structuring a like kind exchange that complies with IRS requirements includes:

  • Determining what Property qualifies as “like kind.”
  • Understanding the difference between tax “deferred” and tax “free.”
  • Documentation Requirements, including assignment of purchase/sale contract and notice to other party to purchase/sale contract.of Like Kind Exchange.
  • Exchange Deadlines and consequences of failure to meet Deadlines.
  • Identifying and evaluating a Qualified Intermediary.
  • Minimizing Risk of Loss of Exchange Funds.
  • Retrieving Exchange Funds if Like Kind Exchange cannot be timely completed.
  • Avoiding Actual or Constructive Receipt of Exchange Funds.
  • Avoiding Delay or Assumption of Unreasonable Risk in connection with Like Kind Exchange.
  • Like Kind Replacement Property Identification Requirements.
  • Designating Multiple Like Kind Replacement Properties.
  • IRS Safe Harbor Requirements.
  • Seller Financing and Tax Deferred Exchanges: Treatment of Seller Financing as “Boot.”
  • Tenancy-in-Common Interests as Replacement Property.
  • Tenancy-in-Common Agreement Requirements and Like Kind Exchanges.
  • “Drop and Swap” Technique when not all partners or limited liability company members wish to participate.
  • Related Party Like Kind Exchange Holding Requirements.
  • Related Party “Shifting Basis” Rules.
  • Simultaneous Exchanges.
  • Delayed and Reverse Exchanges.
  • The Build To Suit Exchange.
  • Parking Exchanges.
  • Personal Property Exchanges.
  • Refinancing Before and After Exchanges.
  • Workout/Foreclosure Exchanges.
  • Calculation of “Boot” and Capital Gains Tax.
  • Depreciation and Like Kind Exchanges.
  • Tax Treatment of Closing Costs in Like Kind Exchange.
  • Installment Contracts and Like Kind Exchanges.
  • IRS Reporting Requirements and Deadlines.
  • Non-tax Motivated Reasons to Participate in Like Kind Exchange.
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